JACKSON, Miss.— Mathematical errors in the Mississippi Legislature’s tax-reform plan could mean that Mississippi abolishes the income tax much sooner than intended without first meeting significant economic growth targets.
House and Senate leaders say another bill, Senate Bill 3095 could serve as a vehicle for any changes the Legislature needs to make to fix the tax-reform plan, House Bill 1.
Mississippi House Speaker Jason White, R-West, said if the Legislature cannot fix the errors in the income tax bill this year through S.B. 3095, lawmakers can work on it another year.
“And certainly, for four years, we don’t have to deal with the trigger anyway, so conceivably you will certainly have other leadership in place in maybe all these (positions). So, new faces could address it if this current body is unable to this session,” he told reporters on March 24.
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Mississippi Senate Finance Committee Chairman Sen. Josh Harkins, R-Flowood, explained on the Senate floor on March 17 that Mississippi would slowly abolish the income tax by reducing it annually from the current 4.4% until the tax rate reaches 3% in 2030.
Harkins said that if the State’s surplus in revenue from the previous year was greater than 85% of $407 million, the State would further reduce the income tax by 0.20% starting in 2031 under the plan; by 0.25% if the surplus was 100% of $407 million; and by 0.30% if the surplus was over 115% of $407 million. The cycle would continue annually based on economic growth until the income tax was completely eliminated, he said.
But the Senate’s amendments to H.B. 1 on page seven instead said the State would reduce the income tax by 0.20% if the State’s surplus in revenue was greater than 0.85% of $407 million instead of 85%. That error would mean that instead of the State having to reach a $345.95 million surplus, its revenue would only have to meet a $3.45 million surplus for the State to lower the income tax by 0.20% each
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